Commentary and analysis to persuade people to become socialist and to act for themselves, organizing democratically and without leaders, to bring about a world of common ownership and free access. We are solely concerned with building a movement of socialists for socialism. We are not reformists with a programme of policies to patch up capitalism.

Saturday, August 05, 2017

China's African Expansionism

Addis Ababa and Djibouti are now connected by a new $4-billion, 470-mile-long rail line, the first electrified cross-border rail system in Africa built by China’s state-owned rail and construction firms. Ethiopian officials say the line will eventually grow into a 3,000-mile rail network that stretches across neighboring Sudan, South Sudan, and Kenya — where China recently completed another railway, for $3.8 billion. Ethiopia relies on Djibouti’s ports for 90% of its foreign trade. But since the old railroad collapsed in 2009 after decades of decline, the landlocked country’s billions of dollars of imports and exports — fuel, coffee, livestock — have had to travel by truck, a three-to-four-day journey along rutted, dusty roads. The new rail line, which will be fully operational by October, will cut the trip to 12 hours.

China has described it as an exercise in altruism. Yet for China, investing in Ethiopia is more strategic than philanthropic. China sees an opportunity to improve transportation through the Horn of Africa and make itself the dominant economic partner on a continent that is about to see an explosion of new cheap labor and urban consumers. By 2034, Africa is expected to have 1.1 billion workers, the world’s largest working-age population, according to economic forecasts. By 2025, the continent’s consumers will be spending $2 trillion a year.

China surpassed the U.S. as Africa’s largest trading partner in 2009, and the numbers continue to climb. China’s African investments were previously aimed primarily at creating political allies across the continent. Now, Beijing invests heavily in hearts-and-minds projects such as soccer stadiums and hospitals. China sees Africa as an important economic opportunity. It has been pouring money into infrastructure across the continent, and this week it opened its first overseas military base in Djibouti. The 90-acre complex includes housing for thousands of soldiers and berths for commercial and military vessels. Chinese officials call the base a “supply center” intended primarily to support China’s anti-piracy efforts and protect its commercial interests. Peter Dutton, professor of strategic studies at the Naval War College in Rhode Island, said China’s new base says more about the country’s economic heft than its military ambitions. “What we’re talking about is fundamentally geoeconomics, rather than geo-strategy,” he said. On the other hand, China is “walking away from some of the premises that have undergirded its foreign policy for 60 years,” he said. “They’re beginning to act like a great power which takes a role in international politics and security. And that’s a fairly significant change for China.”

Mekonnen Getachew, a project manager at the Ethiopian Railways Corp., which oversees the rail line, explained “The rail will make every economic activity easier. Our economy will boom...”

“Americans still see Africa as a place where there are a lot of presidents for life, wars and famines,” said Reuben Brigety, dean at George Washington University’s Elliott School of International Affairs and a former U.S. ambassador to the African Union. “They don’t understand what’s happening on the continent economically and demographically.” China seems more attuned to Africa’s needs. “China doesn’t give simple aid,” Getachew said. “They do give loans. You work, and you return back. That’s a good policy. Aid is just making slavery.”

The China-Africa relationship has almost been entirely transactional: China gave African states easy loans, enabling them to build bridges and stadiums; in return, those states gave China access to natural resources, such as oil, timber and nickel, fueling China’s economic boom. China’s infrastructure expenditures are an essential element in plans to emerge from a long cycle of drought, poverty, famine and war.

In Addis Ababa China has built whole neighborhoods, a $475-million light-railway system and even the African Union headquarters, a $200-million complex that dominates the city’s skyline. In the country’s hinterlands, it has constructed several industrial parks, anticipating a manufacturing boom. China stands to gain tremendously from its investments. Chinese businesses, hampered by slowing growth at home, are increasingly treating the continent as a major overseas market. In a Chinese-built industrial park along the new rail line, in a Chinese-run factory, thousands of employees of Huajian Shoe Co. — all of them Ethiopian — work 13-hour days gluing, inspecting and boxing women’s shoes. Above them hang propaganda posters in Chinese, English and Amharic, Ethiopia’s national language, imploring workers to “win honor for the country” and to “absolutely obey.” Zhang Huarong, the company’s chief executive, declared “Africa is too poor. It needs entrepreneurs like me to balance out the global economy, so that more people can live a happy life.” The new rail will reduce shipping prices from $5,000 per container to $3,000, he said. And for the cost of one Chinese worker, Zhang can hire five Ethiopians. He plans to employ 50,000 within eight years. Every pair of shoes produced in Huajian’s factories is exported to the U.S.; its clients include the labels Tommy, Guess and Lucky.

China has given Djibouti’s government billions of dollars in loans and investment, helping fund new ports, two airports and a pipeline for drinking water from Ethiopia. It’s also planning a series of power plants and a tax-free manufacturing zone.